Brazilian Exploration Scenario

and Opportunities

Marina Abelha

London, UK

March 6th,2019

This institutional presentation is based upon or derived from sourcesbelieved to be reliable for informational purposes only.

Projections and future values are presented, but no representationregarding their accuracy or completeness is made.

Forward-looking statements regarding our intent, belief or currentexpectations may change without prior notice.

Disclaimer

OutlineAgenda

Implemented Regulatory Measures Year to Date Results

Main Regulatory Enhancements

Brazil´s Unique E&P Environments Calendar of Bid Rounds & Strategic Initiatives

Investment Opportunities

Regulatory Framework Brazil E&P Potential

Final Remarks

1

2

3

“The most excitement at the moment is from thedeepwater,” Mr Brown* told the Financial Times, saying

projects in Brazil, the Gulf of Mexico and West ofShetland in the North Sea were among the mostattractive.

* Andy Brown, Shell’s head of exploration and production

March 2018 - Exxon Mobil and other oil companiesopened their wallets at an offshore oil auction in Brazilon Thursday in a sign that the industry was steppingback into the deepwater drilling business. It was thethird encouraging Brazilian offshore auction since

September, and a vote of confidence for thecountry’s energy reform program (…)

This fresh investment, notably in offshore pre-salt basins,

follows the introduction of significant regulatorychanges to the oil and gas sector within Brazil.

Main Regulatory Enhancements

6

Bidding Rounds (in 2017/2018)

2017 3 Bidding Rounds

PSA 2 & 3 / R14

New Simplified Contract Rules

New Local Content Rules

2017 & Beyond

Bidding Schedule 2018/2019

Extension - Exploration Phase (Rounds 11 and 12)

2018 3+ Bidding Rounds

PSA 4 & 5 / R15

Local Content Waver

(previous rounds - up to 13th Round)

Open Acreage – Entire Onshore

Royalties Reduction

(incremental production in mature fields)

Collateral Burden Reduction

(100% to 30% in marginal fields)

New E&P Database (BDEP)

(ANP/IBAMA joint Environmental Database)

Reserve Based Landing (RBL)

Bidding Rounds Schedule 2020/2021

The New Pre-Salt Exploration Scenario

Before 2017 YTD

2017 - 2018 Bidding Rounds Results

Bidding RoundAcquired

BlocksSigning Bonus

(US$ billion)

RegisteredCompanies

Winner Companies

Premium

37 (24 onshore and 13 offshore)

1.035 32 17 1,556%

3 0.889 10 7 261%

3 0.768 14 6 202%

3 0.849 16 7 202%

22 2.159 17 12 622%

4 1.838 12 8 170%

Total 72 7.5 Fierce Competition with Fantastic Results!

Estimated Impact from 6 Recent Oil Auctions…

New Investments

Hundreds of Wells!

Tax Revenues2017-2018

Million bpd(added peak production) New Platforms

Outline

Implemented Regulatory Measures Year to Date Results

Main Regulatory Enhancements

Brazil´s Unique E&P Environments Calendar of Bid Rounds & Strategic Initiatives

Investment Opportunities

Regulatory Framework Brazil E&P Potential

Final Remarks

1

2

3

Agenda

Sedimentary Area: 7.5 million km2

Brazil’s Current State

Area under concession

~ 280,000 km2

324 Blocks

440 fields

Production

(Dez, 2018)

Oil 2.691 million barrels/d

Natural Gas 114 million m3/d

Proven Reserves

(Dez, 2017)

Oil 12.8 billion barrels

Natural Gas 369 billion m3

9th largest oil producer in the world

and the largest in Latin America

Average oil production per well

Onshore

Pre-Salt

Conventional Offshore

Three Different E&P Environments

East Margin adjacent to the pre-salt region and

Equatorial Margin, including new frontier areas and a

significant number of large mature fields.

Mature Basins and New Frontier Basins (mostly gas

prone). Potential for unconventional to be unleashed.

One of the World´s hottest oil play, home to the largest

offshore oil discoveries in the last decade.

55%

37%

8%

December 2018

85 wells

17,655 bpd

628 wells

1,650 bpd

6,683 wells

16 bpd

Onshore oil Production (Oct, 2018)

38%

107,415bpd

Foster Conventional Production

0

500

1000

Development Wells Concluded

59

June 2018

70%2015/2017

2012/2018

38%

2012/2018

0

500

1.000

1.500

2.000

2012 2013 2014 2015 2016 2017 2018

Th

ou

sa

nd

bp

d

Post-Salt Campos Basin Oil Production

4.500

6.500

8.500

10.500

12.500

14.500

16.500

2013 2014 2015 2016 2017 2018

Northeast Basins Offshore Oil Production

bpd

62%

SEAL

0

500

1.000

1.500

01/2

012

08/2

012

03/2

013

10/2

013

05/2

014

12/2

014

07/2

015

02/2

016

09/2

016

04/2

017

11/2

017

Pre-Salt Oil Production 729%

2012/2018

Th

ou

sa

nd

bp

d

41%2012/2018

RNCE

2014/2018

65

52

140

81

101

91 94108

149

193

139169

216215

122

89 77

3826

2727

87%2011/2018

Exploratory Wells Concluded

Current O&G Recovery Factor

Campos Basin

14%

Maximize Recovery Factor

Final O&G Recovery Factor

Brazil

21%

Campos BasinFinal O&G Recovery

Factor Average Final O&G

Recovery Factor

World

35%

Source: ANP (December 2017)

23%1% addition in Campos Basin:

985Mboe

New Reserves

1% addition in Onshore:

200Mboe

New Reserves

Bidding Rounds Schedule

November 1st Semester 3rd Quarter

To be

definedTo be

defined

October, 28th

Continuous offer of blocks and

mature fields.

Companies can bid on blocks not sold

in previous auctions.

Applications can be submitted

anytime and not just at designated

points.

It will promote exploration activity

especially in onshore areas.

Open Acreage

346,035Km² area

14Mature

fields

15Sedimentary

basins

Open Acreage 1st Wave

884Blocks

Blocks not acquired in previous rounds included

Data packages available

Open Acreage 2nd Wave

441,400Km² area

20Sedimentary

basins1,054

Blocks

Technical and economic parameters under

evaluation

6th Pre-Salt Bidding Round (2019)

Estimated Unrisked Oil in

Place Volumes (P50)

42B/bbl5

Areas

BlocksMin. Oil

Profit (%)Sig. Bonus (R$)

Aram 24,53 5.050.000.000,00

Bumerangue 26,68 550.000.000,00

Cruzeiro do Sul 22,87 1.150.000.000,00

Sudoeste de

Sagitario26,09 500.000.000,00

Norte de Brava 36,98 600.000.000,00

Total 7.850.000.000,00

16th Bidding Round (2019)

42 Offshore blocks

~30,000 km2

Pernambuco-Paraíba,

Jacuípe, Camamu-Almada,

Campos & Santos basins

Next Pre-salt Bidding Rounds

Several blocks in

the Pre-Salt play

including giant leads

Sectors Under Examination

2020Para-Maranhão, Potiguar, Santos Campos & Pelotas Basins

2021Ceara, EspiritoSanto & Pelotas

Transfer of Rights Surplus Opportunities

Legend

4Fields

October, 28th

Atapu, Itapu, Buzios and

Sepia

Implemented Regulatory Measures Year to Date Results

Main Regulatory Enhancements

Brazil´s Unique E&P Environments Calendar of Bid Rounds & Strategic Initiatives

Investment Opportunities

Regulatory Framework Brazil E&P Potential

Final Remarks

1

2

3

Agenda

Attract Suitable Players

Major Operators

Exploration Specialists

Mature Field Players

Small and mid -

sized Companies0302Supermajors

Major Operators01

Pre-Salt Conventional Offshore

Onshore

Supported by Oilfield Service Companies, Suppliers and Financial Institutions !

Brazil E&P Potential

Production Forecast

(next 10 years)

Mature Fields/Basins

Improve Recovery Factor 1% addition

2,2Bboe reserves US$18B investments

We barely Know our Potential…

Unconventional resources under discussion

bpd

M

The most prominent deepwater

environment

New FPSOs

Contracted / In Progress to be unlocked

New Frontier Basins

ANP main objective is to promote a Predictable and Stable Regulatory Framework , that Attract New Investments and Accelerate the Development of the Pre-Salt, Conventional Offshore and Onshore E&P Environment.

Increase E&P Activities Accelerate Pre-Salt Development Improve Mature Fields Production Improve Recovery Factor Enhance Onshore Incentives Expedite Environmental Licensing

Attract the Right Players Giant Fields New Frontiers Mature Fields Onshore

Create a Secondary Market Attract mid/small-sized

companiesMaximize Production Diversity of Players EOR/IOR initiatives New RD&I focus Financing Opportunities

Final Remarks

Create Value through a

Developed, Diverse and Competitive

Market!

Additional Information:

http://rodadas.anp.gov.br/en

www.anp.gov.br

National Agency for Petroleum, Natural Gas and

Biofuels – ANP

Marina Abelhamabelha@anp.gov.br

Deputy Superintendent of Exploration